Habib Bank Limited Internship Report

ACKNOWLEDGEMENT

I am thankful to ALLAH Almighty, who gave me ability and courage to successfully complete this
work, because I am nothing without His blessings for me.

I wish to express my love and obliged for my Parents who supported me financially and
encouraged me morally and I am also thankful to my friends who assisted me in this effort. Special
thanks to below mentioned personalities at HBL; Mr. Ansar Abbass and Mr. Abdul Ghaffar, Who
have contributed and allowed me to participate in all kinds of professional development.

I am also highly thankful to our teacher for providing us references to get information regarding
the specific internship report.

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Habib Bank Limited Internship Report

Table of Contents

CONTENTS Page No.

Sr.No.

1 About HBL 3
2 ORIGIN OF TERM “BANK” 4
3 HISTORY OF BANKING IN PAKISTAN 4
4 History of HBL 5
5 Mission & Objectives 7
6 Organizational Hierarchy 8
8 HBL Products and Services 9
- Individual Customers 9
- Business Customers 11
11 Learning and Experience 12
17 Recommendations & Conclusions 20
18 Bibliography 21

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Habib Bank Limited Internship Report

1. About HBL

HBL is the prime Bank in country, established in 1941, having its registered head office in Karachi. It
was nationalized in 1974, but on 26th February 2004 it was privatized by Government of Pakistan and
taken over by Aga Khan Fund for Economic Development (AKFED). They acquired 51 percent of
shares of HBL.

It is one of the largest Banks of Pakistan with 1466 branches inside country and 112 overseas offices
(presence in 25 countries) at different destinations around the world covering 5 continents. It
internationally operates in countries including USA (New York), United Kingdom (London, Manchester,
Birmingham), Scotland (Glasgow), Belgium (Brussels), France (Paris), Lebanon (Beirut), Netherlands
(Rotterdam), Turkey (Istanbul), Kenya, Mauritius, Seychelles, Nigeria, Afghanistan, Bahrain, Oman,
UAE, Iran, Sri Lanka, Sudan, Kuwait, Bangladesh, Egypt, Hong Kong, Singapore, Maldives, Indonesia
and Australia. Currently HBL is having customer base of over 6 million

Pakistan International

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Habib Bank Limited Internship Report

2. ORIGIN OF TERM “BANK”

It has not so far been decided as to how the word ‘Bank’ originated. Some authors opine that this word
is derived from the words ‘Baucus’ or Banque’ which mean a bench. Other authorities hold the opinion
that the word ‘Bank’ is derived from the German word ‘Back’, which means ‘joint stock fund’. It is
therefore, not possible to decide as to which of the opinion is correct, for no record is available to
ascertain the validity of any of the opinions.

"A financial institution, deals with money and credit. It accepts Deposits from individuals, firms
and companies at a lower rate of Interest and gives at higher rate of interest to those who need
them.”
“A financial establishment which uses money deposited by customers for investment, pays it out when
required, makes loan at interest, exchanges currency, etc.”

3. HISTORY OF BANKING IN PAKISTAN

The partition plan was announced on June 3, 1947 and August 15, 1949 was fixed as the date on
which independence was to take effect. It was decided that the Reserve bank of India should continue
to function in the dominion of Pakistan until September 30, 1948 due to administrative and technical
difficulties involved in immediately establishing and operating a Central Bank.

At the time of partition, total number of banks in Pakistan were 38 out of these the commercial banks in
Pakistan were 2, which were Habib Bank Limited and Australia Bank of India. The total deposits in
Pakistani banks stood at Rs.880 million whereas the advances were Rs.198 million. The Governor
General of Pakistan, Muhammad Ali Jinnah issued the order for the establishment of State Bank of
Pakistan on 1st of July 1948.

In 1949, National Bank of Pakistan was established. It started with six offices in former East Pakistan.
There were 14 Pakistani scheduled commercial banks operating in the country on December 1973. The
Pakistan Banking Council prepared banks amalgamation schemes in 1974 for amalgamation of smaller
banks with the five bigger banks of the country. These five banks are as under:

1. National Bank of Pakistan

2. Habib Bank Limited
3. United Bank Limited
4. Muslim Commercial Bank Limited
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Habib Bank Limited Internship Report

5. Allied Bank Limited

In early 90’s after the failure of nationalization policy, Government went for privatization of financial
institution. In last ten to fifteen years banking sector in Pakistan has shown tremendous growth. Due to
its remarkable growth, banking sector of Pakistan has become very attractive for foreign investors.
Many investors have already invested and still many more to come.

4. History of HBL
Habib Bank Limited was established by Mr. Ismail Habib on August 25, 1942 on the desire of Quaid-e-
Azam Muhammad Ali Jinnah, father of the nation. It was established with paid up capital of Rs. 2.5
million. It was the first Muslim bank of sub continent. Quaid-e-Azam first of all opened his personal
account.

The first branch of HBL started functioning on 30 th August, 1942 at Muhammad Ali Road Bombay, In
1942, on the desire of Quaid-e-Azam, Habib family migrated to Pakistan and later on shifted the Bank's
Head Office from Bombay to Karachi on 7 th August, 1947 just one week prior to independence, to play
its pivotal role in the development of this newly born country.

At the time of independence, the areas which now constitute Pakistan were producing only agricultural
products raw material for indo-Pak subcontinent. Partially no industries were there to process the raw
material; therefore the raw material was exported from Pakistan. There were 19 non-Indian foreign
Banks which were engaged in the export of crops from Pakistan with only two Pakistani Banks i.e. HBL
and the Australia Bank. The circumstances were completely un-certain. The confidence of the people
had been shaken by the un-friendly environment and till the time peace had not been restored, people
would naturally have been interested in other things. The nation was quite young with extreme scarcity
of resources and these definitely added to the difficulties of the govt., to run its own Banking system
immediately.

Following the announcement of the independence plan in June, 1947, the Hindus residing in the
territories now comprising Pakistan started transferring their assets to India and vice versa. The Banks
included those having their registered offices in Pakistan, transferred them to India in order to bring a
total collapse of the new state. It had been decided that the Reserve Bank of India would continue to
function in Pakistan so that the problem of demand and time liabilities, coinage, currencies, exchange

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Habib Bank Limited Internship Report

rate etc be settled between India and Pakistan and the Indian Notes would continue to be legal tender
in Pakistan till 30th September, 1948. Again due to certain differences between Indian Pakistan, the
India government withheld Pakistan's share of Rs.75 core in forward and subscribed heavily to the
government of Pakistan to the tide over the crises.

At a time when this newly born country was at whirlwind of crises, it was HBL which fulfilled generously
the financial needs of all its sectors, paid salaries to the employees of all Govt. departments, helped in
the establishment of State Bank of Pakistan which the Quaid-e-Azam inaugurated on July 1 st, 1948.
HBL after partition opened its branches throughout Pakistan to provide finance and other facilities to the
business community. In association with HBL, the Govt. sponsored Pakistan Finance Corporation
Limited for financing of cotton. The Bank helped handsomely in the construction of WARSAK DAM
PROJECT, WAPDA, & K.D.A. by provided finance and other facilities.

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5. Mission & Objectives

 Mission
“To make our customers prosper, our staff excel and create value for shareholders”

 Vision
“Enabling people to advance with confidence and success”

 Our Brand
Our brand identity is the outward expression of what we stand for as an organization. This is
summarized in our vision, mission and is supported by our values.

 Values
Our values are the fundamental principles that define our culture and are
brought to life in our attitudes and behavior. It is our values that make
us unique and unmistakable. Our values are defined below:

A. Excellence
B. Integrity
C. Progressiveness
D. Customer Focus
E. Meritocracy

6. Organizational Chart of HBL:

A chart defines the line of authority in an organization and its departments. It is a sort of visual
presentation of the organizational structure. It specifies the duties and responsibilities of the personnel
of the organization. The Organizational chart of HBL is given below.

6.1. Organizational Chart:

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Habib Bank Limited Internship Report

Chairman

President

Board of Directors

SEVP SEVP Finance, Audit & Administration

International Operations

SEVP Corporate Banking & Treasury SEVP Asset Remedial Management

SEVP Retail Banking & Information SEVP Credit Policy

Technology

SEVP Corporate Banking, financial

institute & Project Finance

7. HBL PRODUCT & SERVICES

HBL product and services are divided into two main divisions
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 Individual Customers
 Business Customers

7.1. INDIVIDUAL CUSTOMERS

With a customer base of 5 million and a network of more than 1,450 branches in Pakistan, HBL is the
largest private bank in the country. Our network means that we are geographically closer to our
customers than any other bank. This gives us the insights needed to provide a variety of products that
directly reflect customer needs.

HBL caters to all market segments, offering products that are as diverse as the people we service. We
remain resolute in our commitment to provide products that are competitive and services that are
exemplary, needs and works closely with you to realize your goals.
HBL provides the following products and services to meet its individual customer requirements. Product
and services that includes in Individual Customers are

 Car-to-Car
 Car Loan
 Credit Cards
 Deposit Accounts
 Banc assurance
 Debit Card
 Phone Banking
 Mutual Funds

HBL Car-to-Car
HBL Car-To-Car is a revolutionary car financing offer. It makes the car of your choice affordable
and practical with a buy back guarantee. HBL Car-To-Car offers matchless features and unique
options at the end of the lease. Now you can drive a new car at the end of every two years.

HBL Car Loan

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Habib Bank Limited Internship Report

HBL Car Loan helps you get your preferred car through a simple and hassle-free process,
backed by superior service and support. Now you can drive a car you always wanted.

HBL Credit Cards

Welcome to a world of convenience, flexibility and opportunity. The HBL Credit Card will add
simplicity and excitement to your life. Accepted at over 24 million merchants worldwide, HBL Credit
Card makes shopping fun and paying simple. Make the most out of your shopping experience with your
very own HBL Credit Card i.e. by Gold Card and Green Card.

HBL Deposits Accounts:

HBL offers a wide range of accounts suited to meet individual customer needs.

Terms Accounts
Offered in a variety of tenors with deposits as low as Rs. 10,000.

Savings Accounts
HBL’s Saving Accounts cater to individual saving habits

Current Account
Current Account offered the features that meet daily banking needs.

Foreign Exchange Accounts

Offered in multiple currencies with interest paid on a quarterly basis

HBL Banc assurance

HBL and New Jubilee Life Insurance Company Limited (NJLI) introduce Amaan (Retirement
Plan) and Tabeer (Child Education & Marriage). These products have been designed keeping HBL’s
customer base as the focus and will provide life insurance along with an investment option.

HBL Debit Card

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Habib Bank Limited Internship Report

HBL Visa Debit Card allows you to pay for your purchases directly from your bank account. You
don’t have to carry cash and your monthly statement provides you with a complete record of all your
transactions so you can manage your expenses with ease.
It has following prominent features
 No Interest
 Ease & Security
 No Liability
 International Recognition and Acceptability
 Spending Limits
 Free Account Statement
 24 Hour Customer Service
 Global Customer Assistance Service

HBL Phone Banking

Your bank is just a phone call away. You can now call HBL Phone Banking and save a trip to
the branch. Your query will be resolved in a single telephone call from anywhere and at anytime.

7.2. BUSINESS CUSTOMERS

HBL has a long history of being a partner of growth for business and industry. We provide tailored
banking solutions to business customers of all sizes in a wide range of industries. We cater to the
needs of a broad spectrum of clients. To do this, the business banking group is segregated by the size
of the customer.

For Business Customers HBL provides

 Corporate Banking
 Commercial Banking
 Investment Banking
 Islamic Banking
 Cash Management
 Zarai Banking
 Global Treasury
 Asset Management

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Habib Bank Limited Internship Report

8. LEARNING AND EXPERIENCE

I have started my Internship Program from 26th July 2010 to 4th September 2010 in Habib Bank Limited
(HBL) Swan Camp G.T Road Rawalpindi branch. The total duration was of 6 weeks. The branch where
I done my internship was computerized that all things to be done through computerized system. During
my Internship Period I’ve learned and performed various tasks at different time period.

8.1. Departments I worked in

During the six week internship as I had to work in different department. The day I reported in branch
(26th July), manager operations had introduced me with Mr. Ansar Abbass experienced bank employee
and told me that he would act as internship supervisor. Mr. Ansar Abbass with mutual consultation
assigned me three departments which are as follow

 Operations
 Account Opening Dept.
 Deposits Dept.
 Remittances Dept.
 Clearing Dept.
 Billing Dept.

8.2. Details of Training

 First Week
In the beginning I worked in Account department of the branch, where I learned that how to open
different deposits accounts in the bank, and what are their procedures and requirements.

8.2.1. Account Opening Department

In this account department I gain the particle knowledge about opening. The customer opening
account/saving accounts can be categorized as following:
1) individual
2) firm

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Habib Bank Limited Internship Report

3) company
4) trust
5) staff
6) others

o Filling of an Account Opening form:

In order to open an account first of all the customer has to fill a form prescribed by the bank.
The person is required to bring some reference or introduction for opening the account. Introducer may
be a person who has an account with HBL.

Some important information regarding introducer e.g. the name and account number of the
introducer is written on the space provided on the specimen signature cards. Then in order to find out
whether he is a true introducer or not a letter is sent to him thanking him for this introduction, so that
any thing wrong may come into notice.

There are different requirement for different types of accounts and account holders. An
important thing is that the customer should have a corporate customer. The corporate customer limit is
40 million and this branch always deals the corporate customer.

General rules for opening an account:

 One person can open only one account in the same branch with the same category.
 In the event of death of an account holder the credit balance will be transfer to the heirs of the
diseased individual account.
 Services charges will be deducted periodically as prescribed from time to time on the accounts
that are under the limit of specific account.
 Services charges are not applicable on that accounts that are prescribed as exempted.
 A distinctive number will be allotted to the each account.
 The bank can close those accounts that are under the minimum limit of the bank.
 Any sum to be deposited in the account should be accompanied by paying in slip showing the
party account number and the name.
 Account holder can only withdraw the sum of money by his own account by cheque.
 Cheque should be signed by the account holder by the specimen given by the bank.
 Post dated and defective cheque is not accepted.
 If statement of account spoiled a new will be issued on cost.

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 Any change in the address should immediately communicate to the bank.

 The account holder wishing to close the account must surrender the cheque book.
 Account may be transfer from one branch to another same branch without any charges etc.

I remained there in the account-opening department for one week and later I moved towards the
Deposit Department but with the passage of time and time to time I guide and inform the clients who
are interested in opening account in the bank and help them in filling of the form.

 Second Week

In second week I moved to Deposit department where I had learned its basic operations. I have learned
some basic functions of banking i.e. how deposit amount are carried out in the bank. It is done in two
ways. One is Customer wants to deposit through Cash and other is if he wants to deposit through
Cheque. In first case where Customer wants to deposit through Cash a voucher is filled for the
customers with the descriptions of Account number, amount deposited title of the account and the
name of the customer having that account. The depositor put a signature on the voucher and the
amount is paid to cashier who stamped it and the voucher consisted of two parts, one is given to the
customers and the other part remains with the bank. In this type of deposit, the voucher is received by
writing the amount as BY CASH. And In Second situation where customer wants to deposit through
Cheque the same procedure is followed but in the voucher the

Cheque number through which the amount is deposited is written against writing BY CASH. It becomes
my whole time duty during my internship program to guide and help people in filling their deposit slips.

8.2.2. The Deposit Department

I worked in this dept for one week and learned that the acceptance of deposit is the real source
of income of a bank. Deposit Department is the backbone of commercial banking.Deposit is often used
to describe the money which customers of all kinds leave with the bank. Deposit account can be
defined as an account, which is opened to earn interest.

The term deposit is highly misleading. It is not something deposited for safe deposit box. Bank deposit
is not like that; when one brings currency to the bank for deposit the bank does not put the currency in

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Habib Bank Limited Internship Report

the vault. It may put small fraction of the currency in the vault as Reserve but it will lend most of
deposits to someone else.

o Types Of Deposit Facility:

Deposits are broadly classified into the following three categories:

i) Demand deposits
ii) Saving deposits
iii) Time deposits

The procedure undertaken upon receiving deposits from the customer is as follows:

1) Examining the deposit slip to ensure that the name and the account numbers are clearly indicated.
2) Counting the cash/cheque and agree the total with the amount on the deposit slip.
3) After that the pay-in-slip is validated for cash transaction/ transfer/ clearing transfer as appropriate
before the counterfoil a handed over the customer.
4) Cheque assigned by the director, partners, employees of a company, drawn in favor of themselves
and credited in their account in the bank are to be scrutinized.

 Third Week
In third week I moved to Remittance department where I had learned its basic operation.

8.2.3. Remittance Department

Remittances are sums of money sent in payment for or against something. The remittance department
is mainly concerned with these payments. Remittances are divided into: inward remittances and
outward remittances.

a. Inward remittances

Inward remittances refer to payment in favor of the banks account holders inward remittance includes
all Cheque received for collection.

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Habib Bank Limited Internship Report

b. Outward remittances

Outward remittances are all payments made to other people on behalf of the account holders in the
bank. Outward remittances can also be done for none account holders who deposit cash in the bank
and remittance tools are prepared for them. Among the work done by the clearing department is
receiving credit advises in favor of the banks account holders and also debit advises against the
account holder’s accounts. There are various tools of remittances to the customers who want the facility
of remittance.

There are various tools of remittances to the customers who want the facility of remittance. One is the
Demand Draft and the other is Pay Order.

o Demand Draft

This draft is made for the customer. This mode of remittance is normally used for payment to out of city
beneficiaries. They are normally also drawn on banks near the beneficiary’s residence.

o Pay Order

It is mostly used when a customer wants to pay someone who is in the same city as he uses and who
prefers non cash payment for any service or goods that he/she sold. This remittance facility is providing
to the general public as a whole.

 Fourth Week

In the fourth week of my internship I was shifted to the Clearing section. Every bank performs both as a
paying as well as collecting functions on behalf of its customer. It is however an important function of
crossed cheques. A large part of this work is carried out through the bankers clearing house.

8.2.4. The Clearing Department

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Habib Bank Limited Internship Report

The basic function of clearing dept. arises when HBL account holder deposits cheque of another back
to collect its payment on his behalf or HBL account holder gives a cheque to any other party concerning
to any other bank. Usually a cheque is sent through clearing is credited to the depositor account day
after tomorrow. In this regard there are two types of clearings

 Inward Clearing
 Outward Clearing

o Inward Clearing

Inward clearing means all those cheques which are issued by account holders to other parties and now
these cheques are presented for payment (in term of amount of cheque credit to presenter account).

o Outward Clearing

Similarly when outside parties issue some cheque to our account holders, they deposit these cheques
in Cheque Receipts Department. Afterward these cheques, as relating to other banks operating in
country, are sent to clearing department or further process. Clearing dept. sends these cheques to
respective banks and after realization of cheque, funds are credited to the account of respective
customer. In this regard there are two types of clearing

a. Intra city clearing

b. Intercity clearing

These cheques are sent through NIFT. Time for realization may differ in case of remote areas.

 Fifth Week

In the second last week of my internship I worked for two days in the "Bills Collection section" and then
in the "Accounts section".

o Bills for Collection

Two types of cheques are deposited here

 Outstation cheques
 Habib’s other branch cheques (local)
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Habib Bank Limited Internship Report

Outstation cheques mean different cities cheques are deposited and Local means Habib's other
Branches like Tench, circular road, defence etc. are deposited. All cheques account numbers on the
computer and these figures go to SBP.

The cheques are cleared in 5-6 days. Because "NIFT" receives and delivered to SBP where these
cheques are cleared in 3 days and deliver to the banks, which mention on the cheques.

The cheques require three stamps

 Habib crossing stamp

 OBC number

 Payee's account will be credited.

If the cheques are returned due to some reasons, a returned memo. Random is filled and entries are
recorded on the register.

8.2.5. Account Section

I worked three days in accounts department but as it is a confidential department so they did not give
me enough in formation regarding their working. First day I sorted out the cheques of HBL with the help
of the serial number and the nature of the account and arrange them in sequence. After that I checked
the activity which contains the title of the cheque, amount, date etc. Accounts department maintains the
record of expenses of all the departments, it also maintain the record of all the employees regarding
their basic salary, increment, benefits etc. It is the backbone of HBL

On the next day I worked in the mail dispatch section, the person appointed here asked me to arrange
the letters and to write the mailing address on the envelopes and then to put the letters into the
envelops. It was an interesting. On the following day I repeated the same job and did nothing else.

 Sixth Week

In the last week I was shifted to the "foreign exchange" department. For the first three days I worked
there but in the last three days I was shifted again to the account-opening department due to the
absence of one of the Account opening officer. Therefore I was sent back to the account-opening
department.

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Habib Bank Limited Internship Report

My Leaning Experience
My experience during my internship was nothing short of being fabulous. It developed a practical
attitude in me and realized me the importance of the job assigned to me. The most important things that
I learned from my Internship are

Dealing with different peoples in different styles

 Practical exposure of workplace.

 Practical experience of working practices related with to field of education
 Managing things and creating balance in my work and personal life as well
 I found the six week internship period short so that I can’t go in depth of each section. The
duration should be more than 6 weeks.

Internship is an evitable activity and the experience that is acquired from the internship is spectacular
and this experience helps a lot in professional carrier.

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Habib Bank Limited Internship Report

RECOMMENDATIONS & CONCLUSION

During my Six Weeks Internship at HBL Swan Camp G.T Road Rawalpindi, I observed many things at
the Bank such as its working procedures, policies, and many other aspects of practical nature of a big
organization like Habib Bank Limited. On the basis of all these observations I came to the conclusion.

As we see that this world is very dynamic and changing, so any organization, financial or non-financial has
to be innovative in order to be in a run for competition for the products it develops or the services it provides
to its consumers.
Habib Bank Limited is one of the oldest and more settled banks of Pakistan in fact it remained in the
business of financial services for more than the life of our country. Probably it was one of the most
established Banks at the time of independence of Pakistan. During its course of history Habib Bank
contributed a lot in the development and fostering the growth of the economy in the country.

Despite all these facts there are some areas, which need to be improved, like it should computerize all its
Network of branches in order to meet the requirements of a new era and to fulfill the needs of 21st
century. Some of the main recommendations are given below,

 A Special Training Camp of employee should send abroad, so that they can be more production
for HBL by studying and analyzing banking practices abroad
 An Outline/Timetable for Internees working should be defined by the organization that how
many days an internee will work in each department and who is his/her counselor
 In over-crowded areas, the setup should be made in such a way that it maintains discipline in
branch
 ATM facility should be improved as today’ HBL ATM service is not as much quick, and mostly
remained disconnect from its main Network
 Serious action should be taken on Customer feedback to improve HBL Services
 Modern forecasting techniques should be adopted in order to meet the dynamic and competing
business environment
 Downsizing should not be done, reducing the number of employee, taking more to handle
customers
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Habib Bank Limited Internship Report

BIBLIOGRAPHY
Material on these books, articles and websites has helped me a lot in preparation this report

Books

 HBL Corporate Profile 2008

 HBL Annual Reports 2008 and 2009 first Quarter

Articles & Documents

 BANKING SECTOR REFORMS IN PAKISTAN:

http://www.ishrathusain.iba.edu.pk/speaches/BANKING_SECTOR_REFORMS.pdf
 www.encyclopedia.com/doc/1G1-61864366.html

Websites

 www.hbl.com
 www.habibbankltd.com
 www.hblasset.com
 www.investopedia.com/articles/07/banking.asp
 wiki.answers.com/Q/Evolution_of_banking

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